As wealth decreases in the economy,savers are likely to
A) hold less cash relative to their holdings of bonds.
B) buy more bonds at any given price.
C) lend more at any given interest rate.
D) lend less at any given interest rate.

Question

Quizplus · Accepted Answer

As wealth decreases in the economy, savers may have less disposable income to use for lending purposes, so they may be less likely to lend at any given interest rate. Therefore, they are likely to lend less at any given interest rate.

As Wealth Decreases in the Economy,savers Are Likely to